i get that there is abuse of the system....more importantly i hate that the system can be abused. I've never had a character above lvl 22....though i've had well over two dozen characters ^^; restartitis....anyways.......if you follow normal armor progression: Iron at 1, steel at 6, dwarven at 12, leather at 6, elven at 18, ect. ect. ect. it doesnt seem to bad. Abusing the sytem though is terrible :/ I don't like having to hold myself back in order to not break the game through normal level proggression. It's sad really.
The word 'abusing' infers that a player is doing something wrong, doing something they aren't supposed to be doing, ergo, 'cheating'. That simply isn't the case, not counting a few players who go out of their way to figure out and do freak combinations of things to make weapons with 100,000 damage... that, while not technically cheating, is definitely stretching the bejeebus out of every exploit you can possibly dig up

But most of us players who don't actively decide to gimp, aren't doing that sort of silly nonsense either. We're just choosing normal perks that make our characters stronger and more successful. We use standard smithing and crafting techniques (*without* deliberately hammering them up to 100 as fast as we can with a bunch of iron daggers), in order to improve gear we find and make gear we've earned the ability to make. And we do use normal +smithing gear you can find or buy, and any +smithing potions we loot or find... those were put into the game by Bethesda with the intention of being used by any and all players, correct? And by so playing quite normally in this fashion, we often find that we've outstripped the difficulty of the game, even on Master, sooner or later. And usually not all that 'later', either.
The key to understanding our argument, though, is your exact words above: "I don't like having to hold myself back in order to not break the game through normal level proggression". In short, having to gimp your char in order not to break the [crappy, nonexistent] game balance. You shouldn't have to look at some shiny new sword you've found with better damage, and think "Oh, I'd better just sell this and keep using my inferior weapon, or I'll be too strong". You shouldn't have to look at any crafting skill and think "I'd better not use this at all, or if I do, I'd better be sure not to be very good at it, or I'll be too strong". You shouldn't have to be forced to plan your character to be much weaker than it's possible to be, in order to not quickly overpower even the highest difficulty in the game.
On the contrary, when a game is done right, the hardest difficulty will naturally be a challenge for any and all, even those who've built the strongest character it is possible to build, with all the best of everything you can legally get from playing normally. And if your idea of fun is to gimp a char and force them to have a harder time making it through to increase your personal challenge, then you can also choose to do that at one of the lower levels, which if balanced properly, would provide just the right challenge for those kind of characters. As it is now, you have to settle for less than the best of everything readily available, just to have a challenge on Master. And that just isn't right. It's just poor/MIA game balancing, pure and simple.
I believe this is the point where the apologists come in and say "Oh, Bethesda has never done any kind of balancing in any TES games, you shouldn't even expect it from them."
To which we all should reply- "Why not, exactly?"
By failing in this respect, they are missing an opportunity to make Skyrim a lot more fun, for a lot more people, for a lot longer. Personally, I think that's a goal it couldn't hurt Bethesda to aim for.